What an Explanation of Benefits means

When a doctor, hospital or lab sends your insurer a claim, the insurer sends you an EOB showing how it handled that claim. It usually arrives before the provider’s bill. Any money you owe is asked for on that bill, not on the EOB.

People with Original Medicare get a different notice, the Medicare Summary Notice, at least twice a year. It is not a bill either.

Each insurer words its EOB a little differently. These are the names used on the sample EOB from CMS, the federal agency that runs Medicare, and in the HealthCare.gov glossary.

THIS IS NOT A BILL

The EOB asks for no payment. It shows how the claim was handled.

Provider charges

What the doctor, hospital or lab billed for the visit.

Allowed amount

The most the plan pays for this service, whatever the provider charged.

Paid by insurer

What the plan paid the provider.

Deductible

An amount you pay for covered care before the plan begins to pay. Any part of this claim counted toward it is yours to pay.

Copayment

A fixed amount you pay for a covered service, usually at the time of the visit.

Coinsurance

Your share of the cost, worked out as a percentage of the allowed amount. For example, 20% coinsurance on a $100 allowed amount is $20.

Patient balance

What is left for you to pay after the plan has paid its part. CMS says the provider’s bill is not meant to be higher than this amount.

Out-of-pocket limit

The most you pay in a coverage period for your share of the cost of covered services.

In-network, out-of-network

Whether the provider has a contract with your plan (in-network) or not (out-of-network).

Balance billing

When a provider bills you for the part of its charge the plan did not cover. For most emergency care, the No Surprises Act limits what you can be charged to your in-network share, even from an out-of-network provider.

Remark code

A code with a note from the plan explaining a charge, a payment or a denial on this claim.

CMS says to compare the provider’s bill with the EOB for the same visit, to check that you were billed for the services you received and that the amount matches what the EOB says you owe.